Is There Even a Future for Apple's iTunes Store?

In a world where owning music is quickly becoming a thing of the past, big companies are having to figure out the next step.

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Let's say you wanted to listen to a specific song. Let's say David Bowie's "Young Americans." When the song was released in 1975, you would have had two options: wait for it to be played on the radio or buy the record (or eight track).

Ten years later you had the option of recording the song on cassette tape from a friend's copy, or even recording it straight from the radio.
Ten more years and you could have made your own mix from your collection of cutting-edge compact discs and burned copies for your friends. If you were especially technologically "with-it" you might have downloaded it from one of the proto-Napster bulletin boards of 1995.

In 2005, assuming you were sufficiently frightened or honest enough to avoid illegal downloads, your best option was the iTunes (NASDAQ:AAPL) store.

But what will you do in 2015?

Today, if I want to listen to "Young Americans" I can have it piped to my ears in mere seconds through too many sources to list. Sure, I have the CD copy of Bowie's Greatest Hits that I bought (used) from my college record store in the '90s, and then ripped to my computer in the 2000s. But rather than sort through my unwieldy iTunes library, I can also simply type "Young Amer…" into YouTube's (NASDAQ:GOOG) search window and I won't even have to finish typing the title before clicking through to several decent copies with visual accompaniment, as well as an assortment of live versions and covers.

If I'm not at my desk, I can use the Spotify App to pull this song up on my phone. Or if I just want a "Bowie vibe" to carry through my work day rather than that specific song, I can start a "Bowie channel" on Pandora (NYSE:P) or any number of similar services.

So, if I can listen to basically any song I want whenever I want (subways and airplanes still provide a challenge, but we all know it's only a matter of time before they are wired) what exactly is the point of "owning" a song?

Much like watching baseball or reading a newspaper, people assume that purchasing music will always happen because it always has, but owning music is a relatively new idea. Prior to Edison, the closest you could come to "owning" a song was by buying a piece of sheet music (which is itself a relatively recent invention that required the printing press, mass distribution, and the creation of musical notation).

Sinatra was really the first artist to push the idea of an album as more than simply a collection of songs, and it was of course the Beatles' Sgt. Pepper's Lonely Hearts Club Band that gave us the idea of an album as a cohesive work of art…but all of these ideas are less than a century old.

Additionally, anyone who cares about music and is somewhere between 30 and 50 years old, is already feeling the burn of having to upgrade collections from one technology to the next multiple times in the recent past. And of course the coveted teenage demographic grew up in the digital age, when the idea of owning music was already becoming passé.

Now, more than two years after Apple finally landed the Beatles, with no more worlds left to conquer, it finds itself lord of an empire that's perpetually under attack even as it keeps growing. The latest quarterly sales for the iTunes Store, including movies and apps in addition to music, totaled a record $2.1 billion, and the iTunes music store now reaches 119 countries. But as analyst Horace Dediu pointed out earlier this month, music, movies and the like still account for two-thirds of all iTunes sales, but the growth there has fallen far behind the growth in revenue from apps. Maybe that's why Apple is constantly rumored to be working on its own streaming music service.

Caught in the middle of these fast-moving trends are the artists in a debate that has raged all the way back to the days of cassette tapes. But with the exception of the upper echelon, record sales have never been a huge driver of revenue for artists, who make most of their money from live performances and merchandising. The line from industry executives that bootlegging was stealing from your favorite artists would have been more accurate if it had said, "You are stealing from the kid who gets the A&R guy's coffee." It's hard to feel much sympathy for the collapse of an industry so bloated and corrupt.

While the old structures collapse, bands like Radiohead and Nine Inch Nails have proven that in the modern age, record labels are unnecessary. On the lower end of the scale, some indie bands are finding the self-publishing model to be effective and profitable. Granted, they lose the promotion and tour support that the labels can provide, but history has proven that arrangement to typically be Faustian. Life without labels is somewhat more problematic for jazz and classical artists, where the mechanical royalties are basically the only paycheck the performers will ever receive.

Starting in 2012, in an effort to remain relevant, Billboard began to integrate digital downloads and streams into the reckoning for Top 40 placement. This led to a year when hip-hop was replaced on the charts by oddball viral hits like Fun's Queen-esque "We Are Young," Goyte's "Somebody That I Used to Know" and the ubiquitous "Call Me Maybe."

So it's not hard to look at Apple as the king of a lonely hill. In 10 years, digital music stores may seem as antiquated as pagers, travel agencies, and dial-up Internet.